Kenyans will bear the brunt of the higher Road Maintenance Levy (RML) for the second month in a row as fuel prices remain unchanged despite a drop in the landed costs of fuel.
The Energy and Petroleum Regulatory Authority (Epra) has kept prices unchanged at Sh188.84 and Sh171.60 per litre of petrol and diesel respectively, in Nairobi for the period September 15 to October 14, 2024.
The unchanged prices come despite the landed cost of diesel falling by 2.95 percent to $673.36 (Sh86,893.62) per cubic metre, while that of petrol fell by 1.53 percent to $697.72 (Sh 89,992.37) per cubic metre.
The drop in landed costs, mainly driven by the strengthening of the shilling against the dollar, would have been passed on to consumers in the form of price cuts.
The shilling has continued to rally, with Epra applying an exchange rate of 129.42 units to the dollar in its latest pricing, being the highest rate that the shilling has traded against the dollar in over two years.
However, with the government maintaining the RML at Sh25 per litre of diesel and petrol, coupled with steep cuts on the subsidy, consumers have lost out on the anticipated price cuts at the pump.
The application of a steep subsidy, backed by a drop in the landed costs of refined fuel, most notably in July, meant that Kenyans saw marginal reductions in pump prices despite the high RML.
In the new prices announced on Saturday, the subsidy on diesel and petrol was cut to Sh1.46 and Sh0.83 respectively, from Sh5.20 and Sh3.40.
The steep subsidy cuts have set the stage for Kenyans to bear the brunt of the high RML, putting to an end to government promises that the increase in the levy would not lead to a rise in pump prices or at the very least, deny consumers a price cut.
RML was increased by Sh7 per litre of petrol and diesel in July amid protests and court cases challenging the decision.
The increase in the RML forced the government to subsidise a litre of petrol and diesel by Sh3.35 and Sh2.50, respectively, to offset the impact of the high levy and to contain public outrage over fresh increases in the cost of fuel.
The strengthening of the shilling and the high subsidy have been critical in averting the impact of the high RML charged for every litre of petrol and diesel.
While increasing the RML, the government had banked on heavy subsidies of fuel prices to ensure that the effect was not be passed on to consumers.
Consumers have since December last year enjoyed steady drops in the cost of fuel, a trend that ended last month with the increase in RML.
A complete removal of the subsidy is likely to lead to higher pump prices despite a strengthening shilling, putting the spotlight on the hasty decision to increase the RML.
